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Pharma Stock Roundup: LLY, NVO, BAYRY Q2 Earnings, MRK's New Deal & Other Updates
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The second-quarter earnings season for large drugmakers came to an end this week with Eli Lilly’s (LLY - Free Report) stupendous results. Novo Nordisk (NVO - Free Report) and Bayer (BAYRY - Free Report) also came up with their reports. Merck (MRK - Free Report) announced a global co-development and co-commercialization deal with Japan’s Daiichi Sankyo for its investigational cancer candidate, MK-6070. Novartis (NVS - Free Report) gained FDA approval for Fabhalta for a rare kidney disease.
Recap of the Week’s Most Important Stories
Earnings Update: Lilly’s second-quarter results were exceptionally strong, beating estimates for earnings and sales. Revenues rose 36%, driven by higher volumes of incretin-based products like Mounjaro and Zepbound, as well as non-incretin drugs, Verzenio and Taltz. Lilly’s popular GLP-1 drugs, Mounjaro and Zepbound, both comprehensively beat estimates, benefiting from exceptional demand growth.
Demand for Mounjaro and Zepbound exceeded supply. Lilly is investing in new advanced manufacturing plants and lines in the United States and Europe to increase supply. With the company increasing production volumes,channel dynamics and stocking levels in the United States improved. This boosted sales growth in the quarter.
Strong demand for Mounjaro and Zepbound, as well as non-incretin products, pushed Lilly to raise its sales and earnings guidance ranges for 2024. Lilly raised its revenue guidance range to $45.4 billion to $46.6 billion from the prior expectation of $42.4 billion to $43.6 billion. The earnings per share guidance was raised from a range of $13.50 to $14.00 to $16.10 to $16.60. Lilly also has better visibility on its production plans for Mounjaro and Zepbound for the year and planned launches of Mounjaro in international markets.
Novo Nordisk missed estimates for both earnings and sales. Revenues rose 25% at a constant exchange rate (CER), as strong sales of its diabetes and obesity care products, mainly GLP-1 products, were offset by a decline in Rare disease sales. Its GLP-1 diabetes sales increased 32% at CER. Total Diabetes care rose 26% and Obesity care sales increased 34% at CER. Sales of the diabetes drug Ozempic rose 30%, while Wegovy rose 53% at CER. However, sales of both Ozempic and Wegovy missed investor expectations. Rare disease segment sales were down 3%.
Novo Nordisk raised its sales growth expectation for 2024 from a range of 19-27% at CER to 22-28%. However, the operating profit growth range was lowered from 22-30% to 20-28% at CER. Novo Nordisk’s shares declined in response to the earnings miss and sales miss for Ozempic and Wegovy. The company said it expects continued supply constraints for GLP-1 products.
Bayer’s second-quarter core earnings of €0.94 per share declined 23% year over year. Sales of €11.14 billion rose 3.1% on a currency and portfolio-adjusted basis. New products, Nubeqa and Kerendia in the Pharmaceutical division, continued to do well and offset the negative impact of a decline in Xarelto sales. Consumer Health business returned to growth. The Crop Science business also posted growth in a challenging agricultural market environment.
Sales in the Crop Science segment increased 1.1%. Pharmaceuticals segment sales increased 4.5% while Consumer Health sales rose 5.3% on a currency and portfolio-adjusted basis. Bayer reiterated its previously provided currency-adjusted guidance for total sales for 2024. The company expects to generate sales in the range of €47-€49 billion in 2024.
Merck Expands Cancer Deal With Daiichi: Merck announced an agreement with Japan’s Daiichi Sankyo to co-develop and co-commercialize MK-6070, an investigational T-cell engager targeting delta-like ligand 3 (DLL3), which it obtained from its recent acquisition of Harpoon Therapeutics. The co-development and co-commercialization rights extend to all countries except Japan, where Merck retains exclusive rights. Merck will be responsible for the manufacturing and supply of MK-6070.
The latest deal expands Merck’s existing collaboration with Daiichi Sankyo to co-develop and co-commercialize the latter’s three DXd antibody drug conjugates or ADCs — patritumab deruxtecan/MK-1022, ifinatamab deruxtecan/ MK-2400 and raludotatug deruxtecan/MK-5909 worldwide, except Japan.
MK-6070 is being developed in a phase I/II study as a monotherapy in certain patients with advanced cancers associated with expression of DLL3 and in combination with Roche’s Tecentriq (atezolizumab) in certain patients with small cell lung cancer (SCLC). The companies plan to evaluate MK-6070 in combination with ifinatamab in certain patients with SCLC. For the deal, Merck will receive an upfront cash payment of $170 million.
Merck also announced that it is discontinuing a phase III study evaluating a fixed-dose combination (coformulation) of vibostolimab, an anti-TIGIT antibody, and its blockbuster PD-L1 inhibitor, Keytrudafor the first-line treatment of extensive-stage SCLC. The decision was based on the recommendation of an independent Data Monitoring Committee (DMC), as data showed that the primary endpoint of overall survival (OS) met the pre-specified futility criteria. The candidate also led to higher side effects in the study.
FDA Approves Novartis’ Fabhalta for IgAN: The FDA granted accelerated approval to Novartis’ Fabhalta (iptacopan) for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN), a progressive and rare kidney disease. The approval is based on a pre-specified interim analysis of the phase III APPLAUSE-IgAN study. The continued approval of Fabhalta for IgAN will be based on verification and description of clinical benefit from the ongoing phase III APPLAUSE-IgAN study.
Fabhalta was approved for the treatment of adults with paroxysmal nocturnal hemoglobinuria (“PNH”), a rare blood disorder, in December last year. The drug is also being evaluated for a range of complement-mediated diseases, including C3 glomerulopathy (C3G), immune complex membranoproliferative glomerulonephritis and atypical hemolytic uremic syndrome.
The NYSE ARCA Pharmaceutical Index declined 0.4% in the last five trading sessions.
Image: Bigstock
Pharma Stock Roundup: LLY, NVO, BAYRY Q2 Earnings, MRK's New Deal & Other Updates
The second-quarter earnings season for large drugmakers came to an end this week with Eli Lilly’s (LLY - Free Report) stupendous results. Novo Nordisk (NVO - Free Report) and Bayer (BAYRY - Free Report) also came up with their reports. Merck (MRK - Free Report) announced a global co-development and co-commercialization deal with Japan’s Daiichi Sankyo for its investigational cancer candidate, MK-6070. Novartis (NVS - Free Report) gained FDA approval for Fabhalta for a rare kidney disease.
Recap of the Week’s Most Important Stories
Earnings Update: Lilly’s second-quarter results were exceptionally strong, beating estimates for earnings and sales. Revenues rose 36%, driven by higher volumes of incretin-based products like Mounjaro and Zepbound, as well as non-incretin drugs, Verzenio and Taltz. Lilly’s popular GLP-1 drugs, Mounjaro and Zepbound, both comprehensively beat estimates, benefiting from exceptional demand growth.
Demand for Mounjaro and Zepbound exceeded supply. Lilly is investing in new advanced manufacturing plants and lines in the United States and Europe to increase supply. With the company increasing production volumes,channel dynamics and stocking levels in the United States improved. This boosted sales growth in the quarter.
Strong demand for Mounjaro and Zepbound, as well as non-incretin products, pushed Lilly to raise its sales and earnings guidance ranges for 2024. Lilly raised its revenue guidance range to $45.4 billion to $46.6 billion from the prior expectation of $42.4 billion to $43.6 billion. The earnings per share guidance was raised from a range of $13.50 to $14.00 to $16.10 to $16.60. Lilly also has better visibility on its production plans for Mounjaro and Zepbound for the year and planned launches of Mounjaro in international markets.
Novo Nordisk missed estimates for both earnings and sales. Revenues rose 25% at a constant exchange rate (CER), as strong sales of its diabetes and obesity care products, mainly GLP-1 products, were offset by a decline in Rare disease sales. Its GLP-1 diabetes sales increased 32% at CER. Total Diabetes care rose 26% and Obesity care sales increased 34% at CER. Sales of the diabetes drug Ozempic rose 30%, while Wegovy rose 53% at CER. However, sales of both Ozempic and Wegovy missed investor expectations. Rare disease segment sales were down 3%.
Novo Nordisk raised its sales growth expectation for 2024 from a range of 19-27% at CER to 22-28%. However, the operating profit growth range was lowered from 22-30% to 20-28% at CER. Novo Nordisk’s shares declined in response to the earnings miss and sales miss for Ozempic and Wegovy. The company said it expects continued supply constraints for GLP-1 products.
Bayer’s second-quarter core earnings of €0.94 per share declined 23% year over year. Sales of €11.14 billion rose 3.1% on a currency and portfolio-adjusted basis. New products, Nubeqa and Kerendia in the Pharmaceutical division, continued to do well and offset the negative impact of a decline in Xarelto sales. Consumer Health business returned to growth. The Crop Science business also posted growth in a challenging agricultural market environment.
Sales in the Crop Science segment increased 1.1%. Pharmaceuticals segment sales increased 4.5% while Consumer Health sales rose 5.3% on a currency and portfolio-adjusted basis. Bayer reiterated its previously provided currency-adjusted guidance for total sales for 2024. The company expects to generate sales in the range of €47-€49 billion in 2024.
Merck Expands Cancer Deal With Daiichi: Merck announced an agreement with Japan’s Daiichi Sankyo to co-develop and co-commercialize MK-6070, an investigational T-cell engager targeting delta-like ligand 3 (DLL3), which it obtained from its recent acquisition of Harpoon Therapeutics. The co-development and co-commercialization rights extend to all countries except Japan, where Merck retains exclusive rights. Merck will be responsible for the manufacturing and supply of MK-6070.
The latest deal expands Merck’s existing collaboration with Daiichi Sankyo to co-develop and co-commercialize the latter’s three DXd antibody drug conjugates or ADCs — patritumab deruxtecan/MK-1022, ifinatamab deruxtecan/ MK-2400 and raludotatug deruxtecan/MK-5909 worldwide, except Japan.
MK-6070 is being developed in a phase I/II study as a monotherapy in certain patients with advanced cancers associated with expression of DLL3 and in combination with Roche’s Tecentriq (atezolizumab) in certain patients with small cell lung cancer (SCLC). The companies plan to evaluate MK-6070 in combination with ifinatamab in certain patients with SCLC. For the deal, Merck will receive an upfront cash payment of $170 million.
Merck also announced that it is discontinuing a phase III study evaluating a fixed-dose combination (coformulation) of vibostolimab, an anti-TIGIT antibody, and its blockbuster PD-L1 inhibitor, Keytrudafor the first-line treatment of extensive-stage SCLC. The decision was based on the recommendation of an independent Data Monitoring Committee (DMC), as data showed that the primary endpoint of overall survival (OS) met the pre-specified futility criteria. The candidate also led to higher side effects in the study.
FDA Approves Novartis’ Fabhalta for IgAN: The FDA granted accelerated approval to Novartis’ Fabhalta (iptacopan) for the reduction of proteinuria in adults with primary immunoglobulin A nephropathy (IgAN), a progressive and rare kidney disease. The approval is based on a pre-specified interim analysis of the phase III APPLAUSE-IgAN study. The continued approval of Fabhalta for IgAN will be based on verification and description of clinical benefit from the ongoing phase III APPLAUSE-IgAN study.
Fabhalta was approved for the treatment of adults with paroxysmal nocturnal hemoglobinuria (“PNH”), a rare blood disorder, in December last year. The drug is also being evaluated for a range of complement-mediated diseases, including C3 glomerulopathy (C3G), immune complex membranoproliferative glomerulonephritis and atypical hemolytic uremic syndrome.
The NYSE ARCA Pharmaceutical Index declined 0.4% in the last five trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
Here’s how the eight major stocks performed in the last five trading sessions.
Image Source: Zacks Investment Research
In the last five trading sessions, Lilly rose the most (1.5%), while Pfizer declined the most (6.2%).
In the past six months, while AstraZeneca has risen the most (33.3%), Merck has declined the most (9.1%).
(See the last pharma stock roundup here: AZN, SNY, ABBV Q2 Earnings, PFE & MRK’s Positive Pipeline News)
What's Next in the Pharma World?
Watch this space for regular pipeline and regulatory updates next week.
Lilly, Bayer, Novo Nordisk, Merck and Novartis have a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.